Afghanistan and its neighbors and friends face immense challenges over the coming several years as the US and Coalition commitment and presence there recede. Security vulnerabilities loom large. So do economic and other opportunities for cooperation and collaboration along a central arc in Eurasia where the outer reaches of Europe, the Far East, South Asia and Iran come together. What are the prospects and main tasks for Afghanistan and Pakistan now? How does Afghanistan look from Central Asia, and what are the most important Central Asian strategies for security, stability and prosperity? Is it realistic to expect that energy or other north-south trade will develop across Afghanistan, and how can such trade be fostered given security and other challenges? What is the role of Iran?

CHAIR: The Hon. Robert Finn, Senior Research Scholar, Liechtenstein Institute of Self-Determination, Woodrow Wilson School, Princeton University and former US Ambassador to Afghanistan and Tajikistan

PARTICIPANTS:

• H.E. Shaukat Aziz,^ former Prime Minister, Republic of Pakistan
• H.E. Sherali Gul, Minister of Energy and Industry, Republic of Tajikistan
• H.E. Kairat Kelimbetov, Minister of Economic Development and Trade, Republic of Kazakhstan
• H.E. Ashraf Ghani,^ Chairman, Transition Commission, Islamic Republic of Afghanistan

TRANSCRIPT

Location: Istanbul, Turkey

Time: 5:30 p.m.
Date: Thursday, November 17, 2011

Transcript by
Federal News Service
Washington, D.C.

ROBERT FINN: Good afternoon, ladies and gentlemen. Thank you for being here. We thank the Atlantic Council for preparing this conference in the beautiful city of Istanbul, the poet described as a pearl between two seas. We have a very interesting group of people here today. Many people talk about Central Asia. Very few people talk from Central Asia.

And with us today is the Tajik minister of trade and industry, Mr. Sherali Gul, the former prime minister of Pakistan, Mr. Shaukat Aziz, the minister for energy – excuse me, he’s energy and industry. You’re development and economics – Kairat Kelimbetov from Kazakhstan. And my old friend, Ashraf Ghani, who is not yet president of Afghanistan.

Many things are going on with regard to Central Asia. Just a couple of weeks ago in Istanbul, there was an international meeting of virtually all the neighbors in the region, although Uzbekistan didn’t sign on. They established an Istanbul process to deal with security, economics, development with an eye to Afghanistan and the region.

At the same time, the United States re-announced its new concern for a new Silk Road project to deal with American policies towards Central Asia and what is going on there. The people in the region have for years been talking to one another under the auspices also of the Shanghai Cooperation Organization.

So there are a number of venues in which people talk about Central Asia and what is going on there. And when we look at Central Asia, there are several different Central Asias we look at. There are the countries and their economic development, which is the principal concern of this meeting. There’s also the very important aspect of political development.

It has been 20 years since the end of the Soviet Union. Where are these countries going? Where on the way to a transformation to a different kind of economic system and to a different kind of political system? The elephant in the room of course is Afghanistan, which is both a key in many ways to the success of Central Asia and also is the lock that is preventing Central Asia from moving in many different directions.

And that’s why I’m particularly happy that Ashraf was able to join us because we need to talk about Afghanistan when we talk about Central Asia and the various aspects. So with that, Minister Gul has asked to make a short speech, not more than 10 minutes. And then we will continue the discussion with questions and answers as we had expected.

SHERALI GUL: (In Pashto.) (Applause.)

MR. FINN: Thank you very much. Now, I’d like to turn to the other side of Afghanistan and ask Mr. Aziz if he would tell us how Pakistan kind of looks at Central Asia.

Many years ago, when I lived in Lahore, a Pakistani friend – this is at the time of the Soviet invasion and a Pakistani friend said, well, you know, who’s ever up there in the mountains, sooner or later they come down here and they come – and they come to us and we have to accept them and then we absorb them. And of course, that takes us back to Babur and the Mogul Empire.

And he started out in the Fergana Valley. So everything repeats itself. What’s your take on looking from Pakistan at Afghanistan and beyond to Central Asia? How does it look to you?

SHAUKAT AZIZ: Thank you. Thank you for giving me the opportunity to reflect my views. Pakistan obviously has always looked at Afghanistan and countries in Central Asia as a group of countries and a region which has a lot of synergy, which has a lot of compatibility and which has tremendous potential. But none of this has been realized.

There are issues on the diplomatic side. There are issues on the security issues and there are issues in terms of just opening and improving logistics between the two countries so people can go back and forth. But since we are talking about energy today, allow me to just make a few points. First of all, I strongly believe that interdependencies and linkages are one of the best ways to lay the foundation for strong diplomatic ties between countries.

You can do it by lots of other means. But I have found that these – when there is dependency, when there’s a linkage, the ties are much more sustainable. That takes us to what I call pipeline diplomacy. And to me, pipeline diplomacy is a very important facet of diplomatic relations between different regions and different countries.

So keeping that in mind, the fact that the Central Asian countries are rich in hydrocarbons and in electric power, like Tajikistan has a lot of hydro potential, and actually the shortest border between Tajikistan and Pakistan, although difficult terrain, is hardly 25 miles. It’s as close as that.

So if we can find the appropriate mechanism to get these pipelines going and power transfer coming from one to the other, it will be a win-win for both because in Pakistan – countries like Pakistan are perennially energy-deficit countries. So if they can get electricity from neighbors – we’re already importing electricity, by the way, from Iran. They are increasing their supply to Pakistan. But we want to do this from Tajikistan also.

On pure hydrocarbons – gas and oil – over the years many initiatives have been talked about to bring gas from Central Asia and Afghanistan too because they are right in hydrocarbons, to Pakistan. Pakistan needs gas and the most economic way to get this is through the land route. So, having said that, if we build this pipeline from Central Asia into Pakistan and through Afghanistan it will be a win-win for all.

Why haven’t we done it is the question. We haven’t done it because, one, I guess the political will of all the stakeholders in the world was not as strong as it should have been. And they did not see the light in terms of how this would help diplomatic relations. Two, we have security challenges, both in Afghanistan and Pakistan. They are getting better but there are security issues which means that attracting investment becomes that much more difficult.

When you have security challenges, people don’t want to come in as freely as they would come elsewhere. Third, I think we in Pakistan have to make a better case that even if you have surplus hydrocarbons, not only is Pakistan your market but we offer you the shortest route to the Arabian Sea, the warm waters of the Arabian Sea. So the logic is overwhelming. But we haven’t moved for the reasons I outlined.

Now, going forward, what do we have to do to make this happen? First, political agreement that this makes sense. Two, to create the tariffs and the financial arrangements that it is a win-win for all. Nobody’s asking for any subsidies or anything. It has to be market-based. And it should be such that the producer, the user and the carrier of the pipeline through a third country all get adequately rewarded.

The good news is that there is enough precedent now in the world to do this and the rule of the various legal frameworks are well-established. So we don’t have to reinvent the wheel. If we follow good international practice, we can do that.

Pakistan is a country of 165 million people, growing, you know, 3 to 8 percent a year depending which year you look at. So there will always be demand. But I think for the Central Asian countries, they have to look to Pakistan as a user but more importantly as transit point for getting the energy to other countries.

I’ll just mention one other point, that one major market sitting there is India. And with the improved relations between Pakistan and India, I think it’s quite conceivable to say that these pipelines or pipeline diplomacy can bring in India as a major user too. And if that happens, the economics get even better because, you know, securing a 20-inch pipeline or a 50-inch pipeline, the overhead is about the same.

So if you can do that and have one spur going to India, one to the Arabian Sea and one going wherever you want, you will find that the economics will get very compelling. So the economics exist. The security issues are a challenge. They have to be met. And we have to create a win-win proposition so that everybody feels that by doing this we will be better off than by not doing it.

So I think I can’t speak for the government in Pakistan because I am not in the government now. But I can speak from experience that I think there is a lot of interest, support to make this happen because the need for hydrocarbons is so huge. I think for Afghanistan, Brother Ashraf is here, but they too can use the gas – send their own gas and also get benefit from the royalty and fee.

The last point is that there are issues in the world where pipelines when they go through different jurisdictions there are sometimes issues raised on tariffs, on security and on interpretation of contracts.

That’s why I mentioned this that whatever we do should be on internationally recognized, accepted legal principles. And the venue for satisfying – if there are disputes, it should be some international body so it’s arbitrated quickly. Otherwise if you get gridlocked in legal disputes, a very good asset can turn into a liability.

MR. FINN: Thank you. Ashraf, I’ll turn it over to you. We had many discussions when I was in Kabul about the need to create a self-sustaining economy and 2014 is now the point at which that has to be in place. You’re in charge of the transition in Afghanistan.

With a view to that, what kind of things can be done? Pakistan is one example. Tajikistan is already in agreements with Iran to transit electricity through Afghanistan. What kinds of things are you thinking of to turn Afghanistan from being the lock into being the key?

ASHRAF GHANI: Thank you. It’s very good to be on the same panel with you and with Brother Shaukat and with other colleagues. The binding constraint of Afghanistan is its landlocked nature. But throughout history, it has been a roundabout where people have crossed, where ideas have crossed, where religions have come together.

So let’s now first look at the assets and then the problems. First, there’s minimally $3 trillion worth of minerals in Afghanistan, only 34 percent of the country. Within 20 years, Afghanistan is going to become the largest producer of copper in the world, the largest producer of hydrogen in the world, a very significant player in the gold and an extremely significant player in rare Earth. This is what we know.

But the first issue is how do you get it out. The contract for the largest iron mine is in the process of being awarded. And for the first time, a major consortium of Indian countries is bidding on this. If they get it or someone else gets it, then the question comes. The easiest way, of course, is Pakistan. But the government of Pakistan is not acting on what Prime Minister Aziz has been so eloquently stating.

And even during his time, he and I worked very closely when we were both finance minister, we could not overcome the obstacles. Our goods set up to six months in the port of Karachi where the norm should be one week. So you can see the implications of a political economy. The port of Karachi has got immense corruption problems and patronage issues.

And unless we tackle the institutional issues, so if India were to be our outlet, where are the goods going to? Most likely to Iran. And that means a different set of possibilities. And who is going to become the beneficiary of this? Southern and Eastern India instead of Northern India, that is the logical place.

Two, there has been a perception that Pakistan holds the key to our transport. It’s no longer the case. Only 30 percent of our goods come through Pakistan. Within three years, Turkmenistan is likely to replace Pakistan as our chief transport hub. We are now connected to the Caspian via Turkmenistan because Turkmenistan and Tajikistan both have very, very common interests with us. So it’s a remarkable issue.

So if you turn it back, livelihood is – you know, the cost of security in Afghanistan is going to be 5 billion (dollars) a year currently. We could probably reduce it at best to 3 billion (dollars). And our entire income is less than 2 (billion dollars). So putting the two together, creating a dynamic that makes it affordable is absolutely essential. Because of this, Afghanistan is absolutely focused on regional synergy.

The opening that we have had with Turkmenistan is also connecting us to Kazakhstan. So if you look in terms of three critical things – fuel security, Central Asia is absolutely essential to us and to Pakistan. But the additional thing is also food.

Food security is going to loom very large in both Afghanistan and in Pakistan, and Kazakhstan again has the comparative advantage than with Ukraine and Russia. So it’s to think through. And then it’s finance. And in terms of finance, again, you know, the future funds that Kazakhstan is – and we’re privileged to have somebody who’s managing the sovereign funds and the gov funds become very, very important to this dynamic.

But where is the obstacle? The obstacle fundamentally is what is called the doctrine of strategic depth, which is a renaming of what Lord Curzon wrote in 1907. The imperial mindset within certain quarters of Pakistan has not given way. And so what is the opportunity, what’s the risk?

The opportunity is a region that reopens Pakistan to its Central Asian connections because historically that, you know, what was Northern India – for instance, in terms of textile – exported more to the end of the 20th century to Central Asia and Russia than what was exported through the Southern India to Europe. Energy is absolute must. And I think the point of beginning, we need to create some early wins.

Early win most likely would be liquid gas because pipelines are going to take time. The second early win is electricity. Tajikistan, Afghanistan and Pakistan could arrive at something very quickly. Now, where are the contingency issues? And energy is a positive win-win. Water, unfortunately, is not a win because Afghanistan is the upper riparian and during the years or turmoil, our rights have not been utilized.

International law favors us. Practice favors the downstream. And that issue, again, I think is a hidden driver of conflict in the region that really needs mediation in handling. Related to this is the concept of borders. Afghanistan and Tajikistan have opened an experience that is really quite remarkable in terms of five bridges. The last bridge was inaugurated just last week.

To work through the services across two sides, and I think that would provide an extremely good experience for treating the – (inaudible) – as a zone of cooperation rather than a zone of conflict because the conflicts that are emanating from there are a threat to both countries and we need to reach the people who are the same people divided between two states through cooperation.

But to conclude, the major obstacle is that there is certain interests that are embedded in a very narrow view of the economy and they are powerful. The potential beneficiaries are the public at large. But they are not organized. And second, the military mindset needs to give way not to a strategic depth but economic depth and cooperation. Our most fundamental obstacle is a mental model obstacle and a conception of interest which has been a zero-sum interest.

So while the positive prospects are there, I also want to take this opportunity to serve a warning. Afghanistan and Pakistan are this close to going to three generations of conflict. We are literally in a way where the public in Afghanistan post assassination of President Rabbani is likely to embark on a course of enmity that all the good relations, because as a people we have had fantastic relations over time.

But there is a risk that Afghanistan and Pakistan could descend into a French-German sort of phenomenon. So it is urgent that we pick up the economic issues which are really questions of cooperation and move out of the more confrontational mode in the negative-sum attitude.

MR. FINN: Thank you. I’d like to turn to Kazakhstan. When I was in Tajikistan, they thought bin Laden wanted to kill me and he didn’t succeed. But they made me live in Almaty most of the time. So I got to have three years in Almaty. And from Kazakhstan at that point, this is 10 years ago, Afghanistan was very far away and people in Kazakhstan thought that was very good and they wish it were even farther away.

But we’ve seen just this week there was a terrorist attack in Taraz, which is not very far from Almaty. Last week there were some terrorist attacks in Aktobe, possibly a spillover from Tajikistan. So that Islamic fundamentalist aspect which was never a problem in Kazakhstan has made its showing there and remains, of course, a problem in Tajikistan as well.

Kazakhstan is of course as large as Europe. It’s enormous. It’s under-populated. We all hear about the fabulous riches, and it’s a difficult country to defend when you have two very large and overly friendly neighbors, one Russia and the other China. From the Kazakh point-of-view, how do you see Central Asia? How do you see Afghanistan as a part of the equation of your future?

KAIRAT KELIMBETOV: So thank you very much for the question. You mentioned that we are maybe geographically really far away from Afghanistan and still we have no infrastructure connecting us. But I think you’re right that we are living in a really global village and if some neighboring country is in trouble, it is not good for everyone.

And in Kazakhstan we understand, let’s say, the responsibility in terms of figure out the fastest peaceful decision in Afghanistan. So we understand that and we would like to join also to all the attempts of the global community to really figure out this problem.

But I think I would like to join to the previous speakers to say that before talking about the economic sense, I’d say the pipeline diplomacy or economic recovery in Afghanistan. So let’s talk about the main obstacles of all the global assistance to this country. The main obstacle is the security issues.

And everyone understands this is not only internal issues of Afghanistan. But it is also kind of the – nobody talks about it so let me – I’m not an expert in military area. That’s why I could tell in this delicate manner. Let’s talk about the – we have to figure out some geopolitical equilibrium among all these regional powers in this area. So I am talking about the China, I’m talking about Russia, I’m talking about India, I’m talking about Iran, Pakistan and also United States and other countries.

So if we figure out this equilibrium, I think so this will be like precondition for further military – nonmilitary decision and further economic development. So this is first. So after – if it will be, let’s say, done in very fast area, of course the previous speakers mentioned that there are several generation of people which grew up through the military atmosphere. And this is not normal.

And I think we are all with Afghanistan on the issue of Afghanistan and the further development of, let’s say, development of Central Asia is to connect in different part of the world. So Afghanistan in the history connect India and through Afghanistan connect India, Pakistan with Russia and Europe, through Afghanistan connect maybe China and Iran and further to the Middle East. So in order we have to prepare the infrastructure.

So now it’s maybe all the states to talk about building infrastructure in Afghanistan. But we’re doing some kind of preliminary job in Kazakhstan. For example, this year we finalized the railways from a border with China to – now, Almaty is a former capital of Kazakhstan and from the seaport Aktau in Caspian Sea to the border with Turkmenistan.

So it means that there will be routes through Turkmenistan to Iran and to Afghanistan in the future – (inaudible.) And I think so we’re also building the big road from the – which called the corridor from West Europe to the west of China through territory of Kazakhstan. So we’re trying to build kind of infrastructure. This is first.

The second is we are trying to help not only in long-term perspective but also in short-term perspective and we are helping in terms of providing wheat to Afghanistan and definitely we are I think the best partners in these terms through the, let’s say, multinational or national programs. We are providing also the oil products. And I think there is also good opportunities to communicate in this area.

Coming back to our neighboring countries, Tajikistan and Kyrgyzstan, so you probably know we are also in very difficult economic situation. So that’s why the government of Kazakhstan decided to open the investment fund in these countries, in Kyrgyzstan and in Tajikistan as well. So we also considering all these projects about which is 1,000 or whatever project which really also help to all of these countries.

So recently I was participating meeting of the head of governments of the Shanghai Cooperation Organization in St. Petersburg where the leaders of the governments, all these members and also the observers, including the Pakistan, India and Afghanistan, discussed this situation.

So I think in this format of Shanghai Cooperation Organization, or forming of the Customs Union of Kazakhstan with Russia and Belarus or EurAsEC with Tajikistan and Kyrgyzstan, we are really understanding our responsibility to help not only in terms of a global diplomatic agenda but also in economic terms. And we are ready to do it.

MR. FINN: Thank you. Mr. Minister, what do you think of Ashraf Ghani’s proposal for a shared border and open border with Tajikistan to be used as perhaps a model for the Durand Line? There are Tajiks, of course, on both sides of the border.

I’d be interested in what you think about having a kind of neighborly condominium between the two. And I’d also be interested in your take on what’s happening with the Rogun Dam in Tajikistan and your border assets and also about your relations with China, which claims a large part of Tajikistan’s territory and that is rich in minerals and other wealth. Did he get it?

MR. GUL: (In Pashto.)

MR. FINN: I’d like to open the floor to the audience if there are any questions. No one is raising their hand. That’s fine. Let’s talk a little about boring topics like tariffs and customs.

There is an economic union that some of the countries in Central Asia are in and some are not in. Kazakhstan has altered its laws so that it is very attractive to investment and some of the other countries haven’t. How do you see collateral economic and tariff activities shaping out in Central Asia?

MR. KELIMBETOV: So let me start maybe after Soviet Union collapsed. If you remember, all these countries will be in the same position and definitely so when we lost all of this connection between industries and enterprises was economic crisis during 10 years and when all of these countries start these social and economic reforms.

So and after 20 years, I think we could figure out some kind of a result where we are in these terms. If you know from the beginning, the leadership of Kazakhstan, President Nazarbayev was always for deep economic integration between all CIS countries. So it was initiated from start in 1994. It was, let’s say, starting from the creation of CIS in Almaty. And when further proposals.

But unfortunately all of these proposals during the years was not so successful because the country was – countries were in very, I would say, different stage of development. So we could tell that maybe until this moment there are only several countries achieve good economic outlook in these terms.

I could tell with pride that Kazakhstan started the development from GDP per capita like 700 U.S. dollars. This year we will achieve 11,000 U.S. dollars, which is in nominal terms, which gives us the opportunity next week in Paris to provide some request to the OECD club and we start this.

So in these terms, so it’s very difficult to talk about the common tariff policy between countries with different level of development. Even we see now in European Union when some country is not ready for further integration, even in Europe some countries is not, so preparing for integration. So I would say our approach is very pragmatic approach. So integration is not only – let’s say, is not a political process. It’s a very pragmatic process.

When the country which not only has willingness to integrate but also capacity for integration. So in these terms, in former Soviet Union countries I think we think countries is very close for more deeper integration between each other. I am talking about Russia, Kazakhstan and Belarus.

So we create two years ago the Customs Union, was very much successful during these two years. And I think we are thinking about further integration in terms of a common economic space.

And maybe in the nearest future more, like Eurasian Union or something like this, which is more way – which would try to repeat the integration experience of European Union. There are talks but we have to be prepared not to, let’s say, hurry up just to bring some new members because there is initiatives, for example. The Kyrgyzstani would join to this.

But we start to have some kind of working group. We are ready to do it. So we understand that – let’s say, if a decision will be like geopolitical or geo-economic, military or security, so definitely I think this makes sense. But if it’s just the economic dimension, so we have to check it. Who will pay for this integration? Now, how we see in European Union, they decide who will pay for the problems in some particular countries.

So in these terms, the president of Kazakhstan figures out kind of formal of the integration with different rate. So for example, if you have with Russia and Belarus one type of integration, we have also club of five countries plus Kyrgyzstan and Tajikistan where we have also common tariff policy. And we are working in terms – which called EurAsEC, you probably know. We also are trying to help each other.

For example, we create the anti-crisis fund which is more funding by governments of Russia and Kazakhstan. But we try to help all CIS countries within the crisis because we understand we owe responsibility and that we want and we have to help in the very difficult time.

But also, we are thinking about that – and the recent speech of the President Nazarbayev in his article in the Russian newspaper yesterday was about there should be more deep integration between Central Asian countries. We understand we owe responsibility in Central Asia. Maybe we are in better economic – in business shape right now.

That’s why we try to bring different facilities, like I mentioned, investment fund in Kyrgyzstan and Tajikistan. Were also thinking we create with Russia a Eurasian development bank which is also a big bank and we tried to finance some project in Kyrgyzstan and Tajikistan. We opened the branch office over there.

So this is the way how we’re thinking about the integration in, let’s say, former Soviet Union space. And we understand that the integration should be based on, first of all, an economic principle. And later on it should be based on more political cooperation between leadership.

MR. FINN: Certainly you can see with a country like Tajikistan which is poor and Kyrgyzstan as a large country like Kazakhstan gets significantly richer, you’ll be having population pressures are vectors that you’ll have to deal with. So it’s good to get in on the start and try to work on those issues now where they’re not yet a pressure.

The other elephant in our discussion today is the presence of the United States in Central Asia which, if you look at it from a Central Asian point-of-view, certainly if you look at it from a post-Soviet point-of-view if you were a Soviet person, you’d be very uncomfortable by seeing American flags all around, not the border but inside what was your country.

The United States has announced that it’s going to withdraw its forces and the other international forces will largely leave Afghanistan by 2014. And I’d be curious to see what each of you thinks is going to happen, whether you’re afraid of it or you welcome it or you don’t know. Mr. Aziz?

MR. AZIZ: Thank you. Thank you very much. U.S. forces is what – before I talk about –

MR. FINN: No, I mean, there are two parts. It’s U.S. forces and the U.S. presence in Central Asia.

MR. AZIZ: Yes, yes. Before I do that, just one or two points on the earlier discussion.

MR. FINN: Sure, absolutely.

MR. AZIZ: One, Asian Development Bank several years ago had started an initiative for integrating and bringing the Central Asian Republics – Afghanistan, Pakistan – together. That should be dusted and relooked at. Why reinvent the wheel? They had very good ideas. We went to many conferences. This goes back to my days as finance minister. And we had meetings from everybody – Ashraf was in some of them.

So I think there is a roadmap and there is some broad thinking already on the table. Secondly, when you talk of economic coordination, integration may be too hard a word. But collaboration, coordination, the best way to move is first trade. If you have trade between the various countries and tariff policies which are, I would say, complimentary if not totally the same, that helps a lot. So if there is a country – take Pakistan.

When I walked into office, we had goods where there was 100 percent import duty. And Afghanistan had zero duty. So what happened? Everybody imported in Afghanistan. The goods never reached there. The papers were changed. The same thing came in duty-free. So what did we do? You could put more people on the border, customs. Nothing happens.

The best way to tackle smuggling is reduce your tariffs. We reduced our tariffs. The smuggling has gone down. It’s not eliminated but it’s gone down tremendously. Now, U.S. presence – ladies and gentleman, the world today, every major power has influence – appetite for influence, United States being obviously the biggest. You have Russia. You have China. You have many other countries vying for control.

My view on U.S. presence in terms of embassies and flags, I think that should be welcomed. Anywhere where United States goes in or any other country, for example, it leads to, in my view, constructive engagement between that country and the United States and the rest of the world. However, the question you asked is what will happen, if I understood you correctly, what will happen when the U.S. troops leave and that you were referring to Afghanistan.

My own view is that – (chuckles) – Prime Minister, welcome – my own view is that it will be positive so long as there is enough capacity in Afghanistan to protect their own security, et cetera, which a lot of effort, time, money and lives have been spent to build that. Whenever you have foreign flags and foreign troops in a country, no matter where you are, there will be a large percentage of the population who will not like that.

As they go gradually, and there has to be a good exit strategy, the world has taught us one thing, that when you enter into an area with troops or an area of conflict, the entry strategy is less difficult. The exit strategy is much more difficult. So it has to be done so there’s no vacuum created, maybe a gradual and, you know, the military experts will tell us how to do it. But you can’t just go flip the light switch. It has to be done in a very orderly manner.

And the host country, whoever it is – in this case, Afghanistan – has to build its capacity to make sure there is no void created because if a void is created, then other forces come into play.

But generally speaking, intervention by foreign troops is not a guarantor for peace. Intervention of foreign troops can raise more problems sometimes than what they will solve. However, in this case, now that’s history. The troops were there.

Now, they are gradually moving. And I think it has to be handled in a way that Afghanistan becomes peaceful. When Afghanistan becomes peaceful, the whole region will benefit. Ashraf made some comments about challenges with Pakistan. I will not totally disagree with him. All I’ll say is that the best thing which can happen for Pakistan is a strong, stable, secure Afghanistan.

We will be the dividend of peace in Afghanistan, the biggest beneficiary after the people will be Pakistan. Now, we do – we may have concerns here and there, some he alluded to. These are not non-serious. They have to be tackled. But peace, I have always believed and I have said this, the best thing which can happen to that region is peace in Afghanistan. That’ll influence Pakistan’s domestic security challenges also and it’ll obviously help Afghanistan a lot.

So I view the withdrawal of U.S. forces from Afghanistan as a very positive development. It has to be done in an orderly way, orderly way and those voids I talked about have to be addressed.

But no country will be happy with foreign flags flying on their soil. And Afghans are proud people. They have never been occupied. They will never be and they want to maintain their sovereignty and integrity and defense themselves.

MR. FINN: OK. I’ll just give a last word to Ashraf to address this and what you think of in terms of regional security in the light of this new Istanbul process and the SCO and how that might help to fill the gap after Americans leave or maybe you’ll say that’s just nonsense. And then we’ll have to end.

MR. GHANI: Let me differentiate between stability and security. Stability in Afghanistan cannot come from the barrel of a gun. But use of force is required because the nature of the threats that exist need use of force. Now, the parameters for 2014 have been set. U.S. forces are going to be reduced by 40,000 by June of this year. So concerns that U.S. would not withdraw troops should be squarely put to rest.

On Saturday, President Karzai will announce that 50 percent of the population of Afghanistan would be in the second tranche of the transition that I’m preparing. So we have arrived at the very orderly goal-focused process to reduce. But the nature of the threats from the border areas is increased. It’s not decreased.

Terror is being supported by some states in the region and there’s incontrovertible evidence. The region needs to make a choice. Shaukat and I completely agree. A stable Afghanistan is essential for Pakistan. A stable Pakistan is absolutely essential and all of us together need to arrive at a regional security and development agreement that would be the fundamental basis of rethinking the relationship.

So what the withdrawal of American troops prepares for is now the shift from a military-minded approach to one that puts diplomacy development and security first on the same level playing field and then enhances the development and the diplomatic effort because if the nature of threat disappears – I mean, it’s crazy for Afghanistan to spend $5 billion a year.

That means we should not be educating our children or not developing our infrastructure and the same for Pakistan. So the costs are borne by our people. And I think it’s really imperative now to think through a 21st century diplomacy that would allow us to bring these sets of connections. And the other part of this is India. India is the largest market. I mean, earlier Shaukat was indicated the thing on TAPI, the gas pipeline.

From Afghanistan to Pakistan – from Turkmenistan through Afghanistan to Pakistan, the rate of returns would be 14 percent. The minute it reaches India, it becomes 22 percent. So you see the variable that is there. The development of demand, in India that grows at 8 percent to 10 percent a year – it’s such a phenomenal asset.

And of course there is, again – Afghanistan and Pakistan are in a juncture where they can have enormously good relations with China, with India and with the United States and Central Asia combined. And that’s the vision that we should really be striving because together we can overcome.

Nonetheless, the risks of old-fashioned thinking remain a very, very considerable challenge because unless we handle, as our Kazakh colleague was telling us, the question of security, these are strong, serious investments.

Nobody is going to undertake long pipelines or huge railways or others unless the question of security is relatively – not absolute security but relative security that allows us to move forward.

MR. FINN: OK, thank you.

MR. AZIZ: Just a brief intervention, which is we must recognize and appreciate the process initiated by Turkey with Afghanistan and Pakistan to bring the three countries together. Two weeks ago down the road at the beautiful Çırağan Palace, the three presidents sat with their military and civil advisors and a lot of progress was made and ground was covered.

I think these regional initiatives which Turkey spearheaded have had a very positive impact and we must welcome that. And I think this can lead to sustainable peace and it can lead to sometimes better understanding of issues because of lack of threat from each other.

And the feedback one got from that meeting was that a lot of good ground was covered and that process ought to be encouraged, saluted and continued.

MR. FINN: Thank you. Well, with that, I’d like to thank all the members of the panel for very, very eloquent discussions and thank you all for being here. (Applause.) OK, so we have – yeah, a few minutes before the next session.

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